One of the ultra-low-risk strategies developed by BCI in 2o20 involved selling weekly 10-Delta cash-secured puts. This created a greater than 90% probability that the puts would not be exercised (expire in-the-money or with intrinsic-value). Since 2020 – 2021 represented an unusually low interest rate environment, annualized returns of 8% – 15 % looked pretty […]
Understanding 1-Time Special Cash Dividends and Our Current Trade Status: A Real-Life Example with OMF
Contract adjustments will change the parameters of our covered call writing and put-selling trades but will not result in any trade loss or gain. The Options Clearing Corporation (OCC) will make alterations to our option contracts such that buyers and sellers of calls and put are made whole after the corporate event. On August 6, […]
BCI PODCAST #73: Mid Contract Unwind Exit Strategy at the End of a Contract
Watch Video: Listen To Audio Version: Covered call writing exit strategies will help elevate our returns to the highest possible levels. The mid-contract unwind exit strategy is usually reserved for early-to-late in a monthly contract but there are scenarios when it has application late in a contract. This podcast discusses how COVID-19, implied volatility and […]
Ask Alan #190: Using Options to Enhance Returns When Selling Our Shares
Alan answers a question posed by Barry, who asks: Alan, I own 1200 shares of QQQ in my self-directed IRA at a cost basis of about $195. Today it is trading at $330. I want to sell 600 shares to be better diversified and tax is not a problem since it is in a sheltered […]
Comparing Implied Volatility and Delta When Establishing Projected Trading Ranges During Our Option Contracts
In 2020, BCI developed 2 ultra-low-risk option strategies, one using implied volatility and the other using Delta to establish low- and high-end trading ranges during our covered call writing and put-selling option contracts. We will use 5 real-life examples to analyze the trading ranges predicted by each approach. The data was taken on 8/30/2021 for […]
Collar Strategy Using Weekly Calls and Monthly Puts: A Real-Life Example with LABU
The collar strategy is a covered call writing-like strategy where protective puts are added to our covered call trades. This creates a ceiling (the short call) and a floor (the long put). Typically, the expiration dates of the calls and puts are the same. We must also ensure that the call credit and put debit […]
Closing a Covered Call Trade Mid-Contract: A Real-Life Example with Nucor Corp. (NYSE: NUE)
What happens when a covered call writing trade progresses much better than anticipated? This article will analyze a series of trades executed by William (thanks for sharing) with NUE as he utilized the BCI mid-contract unwind exit strategy. What rules and guidelines should we use to determine if closing both legs of our covered call […]
Selling Cash-Secured Puts Exit Strategies: The 3% Guideline: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)
When we sell cash-secured puts, we must use all 3 of our required skills: stock (or ETF) selection, option selection and position management. Once we have selected an elite-performing security, we then choose an out-of-the-money (OTM) put strike that meets our initial time-value return goal range (2% – 4% per-month, for me). Without exit strategies, […]
Holding a Stock Through an Earnings Report Can Result in Impressive Returns: A Real-Life Example with Crocs, Inc. (Nasdaq: CROX)
One of the golden rules of the BCI methodology is never to sell an option (call or put) when there is an earnings report due out prior to contract expiration. Most of the time we avoid holding these securities in our option-selling portfolios due to the risk inherent in these reports. However, there are exceptions […]
BCI PODCAST 72 Rolling Covered Call Options on Expiration Friday
Watch Video: Listen To Audio Version: When our covered call strikes are in-the-money as expiration approaches, we can avoid exercise by rolling the option. We can roll-out to the next month same strikes or roll-out-and-up to the next month higher strike. We always roll-out to an in-the-money strike but can roll-out-and-up to an in-the-money, at-the-money […]
Podcast
- 73. Mid Contract Unwind Exit Strategy at the End of a Contract
- 72. Rolling Covered Call Options on Expiration Friday
- 71: Dividend Yield Should Be a Secondary Factor for Covered Call Writing
- 70. COMPARING CALL AND PUT SELLING STRATEGIES
- 69. Technical Analysis with The Wendy's Company NASDAQ WEN
- 68. Volatility A Friend or Enemy to Covered call Writers and Put Sellers?
- 67. Should We a Short Put to Help Fund a Collar Trade?
- 66. Comparing the Cost-To-Close Covered Call Trades with Time-Value Return Goals
- 65: The 20%/10% Guidelines for Covered call Writing and Selling Cash-Secured Puts
- 64. Creating Dividend Like Income for Non Dividend Stocks
Recent Comments